Noce: What is bare land co-ownership and how is it insured?

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Question: I live in a townhouse style bare earth condominium complex. I don’t quite understand what a bare land condominium complex really means. The owners have a dispute with the council regarding our insurance obligations. What type of insurance does our bare land condominium company need to carry in order to protect our homes? Please help me!

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Answer: A bare land condominium complex is very different from a conventional condominium complex. In a bare land condominium complex, owners own their individual land (or parcel of land), as well as the building(s) on their land. It is the opposite of a conventional condominium complex where owners collectively own the land (i.e. common property) and individually own their units. When you buy a condominium unit on bare land, you need a real estate report. When you buy a conventional condominium unit in a low-rise, mid-rise, or high-rise apartment building, you do not need a real estate report.

Regarding your question about insurance, condominium corporations generally have certain insurance obligations with respect to the repair and maintenance of units in the event of an insured loss.

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However, bare land condominiums are a special type of condominium and the insurance obligations that generally accompany conventional condominium projects do not necessarily apply. Sections 61(1) and (2) of the Condominium Regulations set out the risks against which condominium corporations must insure.

With respect to bare land condominium units, the condominium corporation is therefore only required to insure against the risks to which the bare land units or any managed property are exposed, pursuant to s. 61(2) of the Condominium Regulation, unless other insurance obligations are imposed on the condominium corporation by its by-laws. Therefore, a review of your regulations is essential to answer your question. Your bylaws will outline the responsibilities of owners and the condominium corporation, if any.

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Useful advice: Without your bylaws, I am unable to comment on the extent of coverage the condominium corporation should obtain. This is a task best left to an insurance broker. The condominium corporation and the insurance broker should review the condominium corporation’s insurance and maintenance obligations with respect to the units. Also, a review of the condo corporation’s standard insurable unit description will help answer some of your questions. The SIUD is designed to provide more clarity to owners and condominium associations regarding their respective insurance obligations.

Roberto Noce, QC, is a partner at Miller Thomson LLP in the Edmonton and Calgary offices. He welcomes your questions at albertacondolaw@millerthomson.com. The responses are not intended as legal advice; readers are cautioned not to act on the information provided without seeking legal advice on their particular circumstances. Follow Noce on Twitter at @RobertNoce.